DATE=4/4/2000
TYPE=BACKGROUND REPORT
TITLE=PUTIN'S PROSPECTS
NUMBER=5-46075
BYLINE=ED WARNER
DATELINE=WASHINGTON
CONTENT=
VOICED AT:
INTRO: Russia's new president-elect, Vladimir Putin,
is not saying what he intends to do, other than
strengthen the state and continue free-market
policies. Some people, noting his firm support of the
war in Chechnya, fear authoritarian tendencies.
Others point to his record of economic reform as
deputy mayor of St. Petersburg. During a recent
briefing at the Center for Strategic and International
Studies in Washington, two analysts of the Russian
economy discussed the challenges ahead for President
Putin. V-O-A's Ed Warner reports.
TEXT: Who is Vladimir Putin, asks Bill Thompson of
the Economist Intelligence Unit, which forecasts
business conditions around the world. He says there
are many versions of Russia's newly elected president.
// THOMPSON ACT //
Everything you read about Putin is true: the
people who say he is authoritarian, the people
who say he is a democrat, the people who say he
is a statist, the people who say he is a
reformer. It is all true because it is my own
view that Putin basically embodies within
himself many of the contradictions of post-
Soviet Russian society, and that is part of his
appeal.
// END ACT //
But the president will soon have to define himself,
says Mr. Thompson, and that will disappoint some of
his supporters. He is expected to declare himself in
favor of economic reform because there really is no
alternative. Massive foreign investment is needed,
but without reform foreigners will not take the risk.
Of course President Putin is yet to be tested, says
Mr. Thompson. Under pressure, he could rise to the
occasion or sink. His big job will be to confront the
business elites who profit from the present
unproductive, highly subsidized monopolies.
Because of an ill and indisposed Yeltsin, Mr. Thompson
says Russia has had a six-year succession crisis along
with economic and political uncertainty. These
conditions have encouraged a predatory capitalism:
// THOMPSON ACT //
In that environment, a rational agent heavily
discounts the future benefits of any long-term
undertaking. And if you discount the future
heavily enough, then asset stripping is more
sensible than investment. Capital flight, too.
The very predatory features of Russian
capitalism reflect the mentality which says
everything may change. We have to steal as much
as we can today and ship it abroad because there
may be no tomorrow.
// END ACT //
Mr. Thompson says President Putin must work to
civilize this business environment.
That environment may already be improving, says Laza
Kekic, also an analyst of the Economist Intelligence
Unit. He says most western businessmen chose to wait
out the economic crisis of 1998. They downsized their
firms and laid off a large part of their work force.
But now they are getting active again:
// KEKIC ACT //
Most businesses are not expecting any great
reformist leap forward, whether it be in the tax
code, accounting standards, even in protection
of property rights. But the key feature is most
businesses think they can live with this. Most
of them actually have a very good experience
with their Russian labor force, and most of them
get along with their Russian partners.
// END ACT //
Mr. Kekic says he is cautiously optimistic because
Russia is enjoying modest economic growth and is
making surprising technological progress in such
fields as software and microbiology.
He says President Putin could be undermined by the war
in Chechnya he so avidly supports. But his selection
to succeed Mr. Yelstin was made with great care. Mr.
Yeltsin wanted to see his legacy as a reformer,
however imperfect, carried on by his successor. Time
will tell if he made the right choice. (SIGNED)
NEB/EW/ENE/RAE
04-Apr-2000 12:16 PM EDT (04-Apr-2000 1616 UTC)
NNNN
Source: Voice of America
.
|
NEWSLETTER
|
|
Join the GlobalSecurity.org mailing list
|
|
|
